UPDATE 2-Powerful Tunisian union rejects cutting subsidies – key reform asked by lenders

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(further elaboration, adds context)

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TUNIS, Nov 10 (Businesshala) – Tunisia’s powerful UGTT union on Wednesday rejected any plans to cut subsidies, a stance against reform that calls for the government to reach an agreement with the International Monetary Fund on a rescue package. would complicate the efforts.

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UGTT spokesman Sami Tahri told reporters a week after the government resumed technical talks with the IMF that a caretaker government can now reform.

“We reject any plans to cut subsidies and we refuse to hike prices. Subsidies should be strengthened (to offset) a significant drop in purchasing power,” Tahri said.

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Negotiations with the IMF on a package, based on painful and unpopular steps to liberalize the economy, were halted on July 25, when President Kais Saied, suffering prolonged government paralysis, dismissed the cabinet, Suspended Parliament and assumed executive power.

Critics of the president described his moves as a coup, while major foreign donors whose financial aid could unlock the IMF deal urged him to return to normal constitutional order.

International donors have raised the need for widespread popular support in Tunisia for reforms to help tackle corruption and waste, which means that Saeed will need support from the UGTT – which represents a million workers and the huge political Dominates – and deals to secure – the leaders of the major political party.

He unveiled a caretaker government in October and promised a national “dialogue”, but has yet to draw up a detailed plan to restore normal parliamentary democracy as donors demand.

“Under exceptional circumstances a provisional government cannot implement economic reforms… There are reforms which may require five years (to be implemented),” UGTT’s Tahri said.

The IMF has urged Tunisia to privatize loss-making state-owned enterprises, along with subsidies and its bloated public sector wage bill.

Saeed installed a caretaker government last month to respond to a wave of street protests over poor public services, economic hardships and fragile social and environmental conditions.

Reporting by Tarek Amara; Editing by Mark Heinrich

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